As one of the largest trading blocks in the world, the EU is seeking less expensive and more efficient ways to produce goods and services. Many European companies are now looking to Southeast Asia for cost effective, human resources. Join2grow takes a look at the benefits of Vietnam.
As the world’s second largest market, the EU is Vietnam’s foremost economic partner, accounting for 17 percent of exports. Two-way trade exceeded EUR 4 billion in the first half of 2007 alone, and total investment into the country now exceeds EUR 2.5 billion. Experts say trade could grow to almost EUR 10 billion by 2010. Bilateral economic and commercial ties have gone from strength to strength.
As the cost of living and wages rise in developed Asian nations such as Korea and, more recently China, companies are seeking less developed countries with large, cheap labour forces. Vietnam has benefited from the ever-expanding search for plentiful, cost effective human resources.
Vietnam’s communication and transportation infrastructure are relatively undeveloped but they are making strides. Primary industrial capacities include textile manufacturing as well as agriculture and forestry, which account for 22% of Vietnamese GDP. Mining and minerals make up another 10% of the EUR 141 billion economy. Vietnam’s growth has averaged over 4% per year over the past 5 years.
The EU as a whole was the biggest donor of grant development aid to Vietnam in 2004 and 2005, and continues actively to assist Vietnam’s socio-economic development. Total assistance has approached of EUR 40 million per year, focussing on basic education and health in particular.